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NCERT Class 9 The Story of Village Palampur
 

 Topic– 1: Organisation of Production

I. Very Short Answer Type Questions. [1 Mark]

1. What is the main production activity in Palampur village?

Ans. Farming.

2. Give two examples of working capital.

Ans. Raw materials and money in hand.

3. Name any one activity in Palampur which is associated with the tertiary sector.

Ans. Transport.

4. What are the four requirements for the organization of production?

Ans. For production, we need land and natural resources, labour or workers, physical capital and human capital.

5. Give examples of fixed capital.

Ans. Tools, machines and buildings are examples of fixed capital.

6. State one basic difference between land and capital.

Ans. The land is a natural resource whereas, capital is man-made.

7. Which type of road connects Palampur with Raiganj and Shahpur?

Ans. An all-weather road connects the village to Raiganj and further on to the nearest small town of Shahpur.

8. Which type of vehicles is being used on the road connecting Palampur to Raiganj? Mention any two.

Ans. Rickshaws, tongas and jeeps.

9. Define production.

Ans. By production, we mean the process of creating the various goods and services, which are consumed by the people of the country.

10. What do you understand by labour as a factor of production?

Ans. By labour, we mean all types of human work – physical or mental — done with a view to earning income.

Short Answer Type Questions. [3 Marks]

1. Explain in brief labour as a requirement of factors of production.

Ans. Labour is another basic factor of production. In fact, land or any other factor, howsoever valuable it is, is of little use unless labour is applied. By labour, we mean all types of human work – physical or mental — done with a view to earning income.

Unlike land, labour is an active factor of production. In fact, it is labour which, in co-operation with land and capital, makes production possible. Land and capital cannot produce anything without the application of labour.

2. What is the role of enterprise in production?

Ans. Land, labour and capital are natural, human and material means of production respectively. No production is possible without bringing these three factors of production together and using them in the right proportion. So there must be somebody to hire them from their owners by paying rent, wages and interest as rewards and to decide the quantities of each needed for production. This is known as an enterprise. Enterprise refers to the services of an entrepreneur who controls, organises and undertakes all risks.

Q. Explain land as the basic requirement for the production of goods and services.
Ans. The land is one of the most important factors. It is a basic factor of production. In everyday usage, by ‘land’ we mean the surface of the earth. But in economics, the word has a special meaning. The land is defined to include not only the surface of the earth but also all other free gifts of nature, for example, mineral resources, forest resources and indeed, anything that helps us to carry out the production of goods and services, but is provided by nature free of cost.

Q. Write a short note on capital as a factor of production.
Ans. Capital is that part of wealth which can be used for further production of wealth. It consists of all kinds of wealth, other than free gifts of nature, which yield income. Therefore, every type of wealth other than land which helps in further production of income is called capital. Different types of machines, raw materials, buses, trucks, rail engines, ships etc., are examples of capital. Producers use these goods as factors of production. So these goods are also called capital
goods.
Long Answer Type Questions. [5 Marks]

Q. What are the four requirements for the production of goods and services? Explain.
Ans. There are four requirements for the production of goods and services. These requirements are known as factors of production. These are :
(i) Land: By land we mean not only the level surface but all gifts of nature which are amenable to human control, such as water, forests, minerals etc.
(ii) Labour: It means the manpower required to do the work. The mental and physical work done by people in an organisation comes under labour.
(iii) Physical Capital: It includes the variety of inputs required at every stage during the production process. This can be classified as follows:
(a) Fixed capital: It includes tools, machines and building etc. that can be used for production for many years.
(b) Working capital: Money in hand and raw material that has to be used in current products are included in the working capital.
(iv) Enterprise Human Capital
: It means need of knowledge and enterprise to put together all other factors of production and ability to sell the produce in the market. This is also called Human Capital.

Q. Throw some light on Physical Capital and Enterprise.
Ans. Capital is that part of wealth which can be used for further production of wealth. It consists of all kinds of wealth, other than free gifts of nature, which yield income. Therefore, every type of wealth other than land which helps in further production of income is called capital. Different types of machines, raw materials, buses, trucks, rail engines, ships etc., are examples of capital. Producers use these goods as factors of production. So these goods are also called capital goods. Enterprise refers to the services of an entrepreneur who controls, organises and undertakes all risks. Land, labour and capital are natural, human and material means of production respectively. No production is possible without bringing these three factors of production together and using them in the right proportion. So there must be somebody to hire them from their owners by paying rent, wages and interest as rewards and to decide the quantities of each needed for production. This is known as an enterprise.

Q. What is physical capital? Explain in brief its types.
Ans. Physical capital is the factor of production. It refers to the variety of inputs required at every stage during production such as tools, machinery, computers, and other equipment that are needed for the production of goods and services. It is used in the production process to enable the conversion of raw material into finished goods. Physical Capital is of two types:
(i) Fixed Capital: The tools, machines, buildings which can be used in production over many years are called fixed capital. Tools and Machines ranged from very simple tools such as farmer’s plough to sophisticated machines such as generators, computers, etc.
(ii) Working Capital: Production requires a variety of raw materials. It requires money to make payments and buy other necessary items. Raw materials and money in hand are called working capital. Production requires a variety of raw materials such as the yarn used by the weaver and the clay used by the potter. They are used up in a single act of production.

Q. Compare physical capital and human capital?
Ans. Comparison of physical and human capital
(i) Physical capital thus consists of those physical goods which are produced for use in future production. Machines, tools and instruments, factories, canals, dams, transport equipment, stocks of raw mate¬rials are some of the examples of physical capital whereas Human capital refers to the stock of knowledge, talent, skills and abilities brought in by the employee, to the organization.
(ii) Physical capital is tangible in nature( it can be seen and touched) while human capital is intangible, it can only be experienced.
(iii) Physical capital It can be traded in the market on the contrary only the services of human capital can be sold.
(iv) Physical capital can be separated from its owner easily but human capital is inseparable from its possessor.
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